How To Make A Budget


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Oh! I feel you. The stress of it is overwhelming. Sifting through receipts, retrieving pocket change and pouring out pages of excel sheets as you try to tack your expenses can be daunting.  However, making a budget can be quite easy. No stress really.

So you may ask….

What is the best way to start a budget?

Let’s be honest, there are many of us who hardly know how much they spend within a month. The way they know for sure is checking the account balance plus change in the pocket. So, if you’re like most people, then the best way is to first track and understand your spending.

You can do this by downloading an app to help you with this. Some of the best free apps out there are Mint, GoodBudget, Mvelopes, BillGuard, Pocket Expense, Homebudget and Expensify. With these apps, you can easily track your expenses and compare it against your income every month.

Income must always be more than expenses, so after tracking all your expenses establish your current position. Be honest about it and further probe your spending. Are you spending more than you earn? Would I like to spend less? What items are taking up most of my cash? Can I do something about it? 

Back to Making Our Budget…

Probing your current situation will help you establish where you want to be and from there, can you build your desired budget. The great news is that anyone can do this – no matter their income level or how your expenses compare to your income.

Let’s Make a Budget

We already know how our income compares to our expenses. If your income is less than your expenses, you must a rare bird in great financial health but sit tight for a minute.

For anyone whose income is less than expenses – know you’re not alone and do not stress. We can fix it. It’s never too late. The fact that you are here means you are willing to do this. All you need it a nudge in the right direction.

So from here, all you need to do now is to jot down the major budget items from the app and the amount adjacent. Compare and contrast each item and ponder on your spending habits. Establish which items you can do without or would like to reduce spending on. It is always wise to live beneath your means. Always.

After shaving off unnecessary spending, establish how much income you have left. Is it satisfactory?


The Easiest Budget Ever Made!

There are only two very simple rules to do a simple budget:

  1. You cannot spend more than you earn – short-term debt is not allowed i.e. credit.
  2. As soon as you get paid – money should move to the right budget categories – no procrastination and no spending on un-budgeted items.

The Way It Works

Instead of having over 12 items in your budget, simply group your budget items into 3 broad categories and allocate the necessary resources to each.

Assume, your paycheck amounts to Kes. 100,000, You can break down your budget items as follows:

Paycheck Recommended %s Kes. 100,000
Tithe 10% Kes. 10,000
Savings 10-15% Kes. 15,0000
Everything Else 75-80% Kes. 75,000


It is extremely vital that the money gets taken out for these budgeted items. If not, then I cannot guarantee that the full amount may not be used for its intended use at the end of it. Therefore, it is always highly advisable to make the process as automatic as possible. Instruct the bank to deduct Tithe and Savings and send to the relevant organizations.

This budget is very simple and can easily be used by people who do not want to budget at all. It allows you to save money, give and live well beneath your means. As simple as this budget may be, it is not efficient as it still leaves plenty of room for foolish spending.

It is also called the mental budget as you can do it in your mind or the lazy budget. So if your willing to put in some more work into your budget and save much much more than read on.

The Money Saving Budget

This budget takes much more time, as it is more thorough and considers everything. This type of budget is the kind that allows you to achieve more saving and greater financial stability.  To do this, we will expand on the mental budget adding as money budgeting items as possible – which is already easy to do as we have the data from the app.

Here are some generally recommended budget percentages, which you may use as a guide to get you started off:

Budget Item Percentage Budget Item Percentage
Housing 25-25% Savings 10-15%
Food 10-20% Insurance 10-25%
Transport 10-15% Personal & Discretionary 5-10%
Tithe & Charitable Gifts 10-15% Debt Repayment 5-15%
Clothing 2-7% Recreation & Entertainment 5-10%
Utilities 5-10%

With the app data, open a spreadsheet at input the data in all the correct categories. Additionally, add any other expenses that you may think of – even the seasonal or annual ones eg. driving license fee. By doing this, we will be able to budget for every possible scenario and avoid surprises along the way – it is also here where we add a category for any surprise expenses i.e. the emergency fund.

Sticking to Your Budget

The surest way to stick to your budget is to budget for entertainment, clothing, personal & discretionary items and taking everything in moderation. For instance, you can budget for dinner with friends every weekend at some popular joints. Also always give yourself some wiggle room with these budgets.

So, this is how budgeting truly becomes more fun as now you do not have to feel guilty spending money as you have already saved, paid bills and now your money is just sitting in the bank account waiting to be spent.

Other Budgeting Options

There are numerous budgeting options that you can use, some are very systematic, such as the 25% budgeting strategy and other are built to instil discipline i.e. the envelope system.  Whatever system you choose to apply, the only thing that matters is that you are budgeting and well on your way to build some wealth and achieve your dreams.


  1. Create a Budget

I would love to hear all about your budgeting process, strategies, difficulties and the challenges you face while drawing up your personal budget, let us know in the comments below….

Meanwhile, You can click on the following links to read more about budgeting:

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Irene Makanga
Irene has an MBA in Finance and is an avid businesswoman, passionate about financial literacy.



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